Gratuity Calculation in the UAE 2026: How to Work Out Your End-of-Service Pay

Last reviewed: 17 October 2026. Based on Federal Decree-Law No. 33 of 2021 and its amendments; DIFC and ADGM employees have separate rules.

Short answer: UAE gratuity calculation is simple once you know the rule. If you've completed at least one year of continuous service, you get 21 days of basic salary for each of your first five years, and 30 days of basic salary for each year after that, based on your last basic salary. The total can't exceed two years' basic salary, and your employer must pay it within 14 days of your last working day. For example, someone on a basic salary of AED 6,000 who leaves after three years receives AED 12,600.

Here's the formula step by step, with examples you can copy for your own situation.

What is end-of-service gratuity in the UAE?

End-of-service gratuity is a lump sum that private sector employers in the UAE must pay to expatriate employees when their employment ends, as long as they've worked for at least one year. It's set out in Article 51 of Federal Decree-Law No. 33 of 2021 (the UAE Labour Law). UAE nationals usually receive a pension through the General Pension and Social Security Authority instead.

How is gratuity calculated in the UAE? The formula

1. Find your daily basic wage: last monthly basic salary ÷ 30.
2. For the first five years: daily basic wage × 21 × years of service (up to 5).
3. For years after five: daily basic wage × 30 × years of service beyond 5.
4. Add the two parts together. Part years count proportionally.
5. Apply the cap: the total can't be more than 24 months of basic salary.

Gratuity calculation examples

Daily basic wage = monthly basic salary ÷ 30. Figures rounded to the nearest dirham.

Worked example: 7 years on AED 10,000 basic

Your daily basic wage is AED 10,000 ÷ 30 = AED 333.33. For the first five years: 333.33 × 21 × 5 = AED 35,000. For the next two years: 333.33 × 30 × 2 = AED 20,000. Total gratuity: AED 55,000. The cap would be 24 × AED 10,000 = AED 240,000, so the full amount is due.

Do allowances count towards gratuity?

No. Gratuity is based only on your basic salary. Housing, transport, phone and other allowances, commissions and overtime are not included unless your contract specifically says otherwise.

That's why the split of your salary matters so much. On a total package of AED 12,000, a basic salary of AED 8,000 gives you 60% more gratuity than a basic salary of AED 5,000. Check the split before you sign. Our guide to the average salary in Dubai explains how UAE packages are usually structured.

Do I get gratuity if I resign?

Yes. Under the current Labour Law, if you've completed at least one year of service you're entitled to your full gratuity whether you resign or your employer ends your contract, as long as you work your notice period. The old rule that cut gratuity for employees who resigned early no longer applies under Federal Decree-Law No. 33 of 2021.

You can lose some or all of your gratuity only in limited cases, such as dismissal without notice for serious misconduct under the specific grounds listed in the law.

What doesn't count as service?

• Unpaid leave is not counted when working out your years of service.
• Service under 1 year doesn't qualify for gratuity at all.
• Part-time employees get gratuity calculated in proportion to the hours they actually worked.

When must gratuity be paid?

Your employer must pay all your final dues within 14 days of the end of your employment. Your final settlement should include:

• your end-of-service gratuity;
• unpaid salary up to your last working day;
• payment for any unused annual leave (you're entitled to 30 days a year after the first year);
• any other amounts in your contract, such as a return flight ticket.

Your employer can deduct money you genuinely owe them, such as an outstanding loan, but must show the deduction clearly.

What if my employer doesn't pay my gratuity?

1. Ask HR in writing for your final settlement statement.
2. If it's late or wrong, file a complaint with MOHRE through the MOHRE app, the website, or by calling 80060.
3. MOHRE will try to settle the dispute. If it can't, the case goes to the labour court.

Keep copies of your contract, payslips and your MOHRE work permit details. They're your best evidence.

Are there different gratuity rules in free zones?

Most free zones follow the federal Labour Law. Two financial free zones have their own employment laws:

• DIFC (Dubai International Financial Centre): employers pay monthly contributions into a workplace savings scheme (DEWS or an approved alternative) instead of a lump-sum gratuity.
• ADGM (Abu Dhabi Global Market): has its own employment regulations, so check your contract and ADGM's rules.

Some mainland employers have also joined the UAE's voluntary savings scheme for end-of-service benefits, which invests your gratuity during your employment instead of paying it as a lump sum at the end.

Plan your next move

Before you resign, make sure you understand your notice period, your gratuity and your visa grace period. Our UAE work visa guide explains what happens to your visa when a job ends. When you're ready, browse the latest jobs in the UAE on GetGulfJob.

Sources

• Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationship, Article 51, and amendments (MOHRE)
• MOHRE guidance on end-of-service benefits and labour complaints
• DIFC Employment Law and DEWS scheme rules

This article is general information, not legal advice. For your own case, contact MOHRE or a UAE employment lawyer.